Experts question mobile threat to NBN

Fixed-line broadband services have always been considered the best choice for home internet, but as mobile services improve questions are being asked about the NBN's future by its boss, Bill Morrow.
Chris Pearce

The topic has previously been shrugged off by the government and NBN itself because, while mobile networks offer download speeds that often leave current fixed-line home broadband speeds in the shade, the relatively small data allowances on mobile plans are insufficient for most homes.

Managing director of research firm Telsyte, Foad Fadaghi, said his company's studies had found that Australian consumers were already starting to view mobile as a reliable option in the home as well as on the go.

Telsyte managing director Foad Fadaghi said that the cost of delivering services was still significantly lower via fixed-line fibre than wireless for internet service providers.
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During late 2016, Telsyte interviewed internet users as part of its Digital Consumer Study 2017 report, and found that 27 per cent of fixed broadband users had also tethered their smartphones at home during the last 12 months due to slow fixed-line services.

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While this study was conducted when most Australians were still on pre-NBN ADSL services, Mr Fadaghi said consumer behaviour was showing that if data allowances could become generous enough then many would also use mobile options at home.

"Australians are already augmenting their fixed-line services with the larger data allowances by tethering their mobile service when a fixed connection hasn't been performing," he said.

"However it would be a balancing act for carriers, as it could impact the quality of services for customers during peak times if they start offering more data. They would need to be competitive with data inclusions but weigh that against potential for congestion as there is a finite amount of spectrum available."

Mr Fadaghi said that the cost of delivering services was also still significantly lower via fixed-line fibre than wireless for internet service providers.

Paul Budde said mobile has a "golden future" but fixed-line services remained much more viable for people who have become accustomed to connecting to Wi-Fi networks and forgetting about data allowance worries.

Telecommunications expert Paul Budde said mobile has a "golden future" but fixed-line services remained much more viable for people who have become accustomed to connecting to Wi-Fi networks and forgetting about data allowance worries.

He said that while data allowances were likely to get more generous on mobile, it was unlikely to be a big enough shift to allow anyone but the most budget internet users to rely solely on mobile.

"Data use over mobile will always be more expensive," Mr Budde said.

"Having said that, if the NBN remains prohibitively expensive for higher speeds and capacity, then the price advantage will be less and therefore more people will use the mobile network more."

Mr Budde said new 5G services were not likely to be suitable for mass market use until 2025, by which time a lot would inevitably have changed in internet delivery technology.

IBRS analyst Geoff Johnson said 4G, 5G and their later generations would always be more expensive per byte than fixed-line internet because mobile spectrum was limited and expensive.

"Customers electing to use mobile only typically do that to avoid paying for a fixed-line phone, it's a great idea particularly for the younger demographic," he said.

"But if you want to run a small business from home or do anything video-intensive, such as healthy family consumption of smart TV streaming, you will want the cheapest volume of data you can get, which will be fixed-line."